Friday’s jobs report from the US, nonfarm payrolls, was sizzling:

• Forexlive Americas FX news wrap: US dollar jumps on hot NFP and then gives it back

Bond giant Pacific Investment Management Company (PIMCO) has dialed back its forecast for Federal Open Market Committee (FOMC) rate cuts this year. The previous PIMCO projection was for 3, but they’ve dialled that back to 2 now as thier ‚base case‘. A PIMCO rep spoke with Reuters after the NFP numbers on Friday:

• this means a little bit less out of the Fed
• the economy is proving for now that it can handle higher rates

Checking FedWatch you’ll see the pricing for a June rate cut is now bordering on a coin toss. I reckon the likelihood is closer to 10% than 50%. If you’ve been following along with my ’no June rate cut for you!‘ shouting this’ll come as no surprise.

FOMC members are piling on the later cut bandwagon:

• Fed’s Logan: It’s much too soon to think about cutting interest rates

• Fed’s Waller says may need to hold current rate for longer than expected, no rush to cut
• Waller’s remarks have pumped up the US dollar
  • (ps still is too)
• More Fed’s Waller: The economy has supported the cautious approach by the Federal Reserve

• Still more from Fed’s Waller: If unemployment goes up no reason to panic
• Fed’s Bostic say he now anticipates only one rate cut this year
• If economy continues to be healthy, why would we cut rates

And, I like this reasoning:

• Global economic recovery, blistering commodities rally … threatening to derail the Fed

FedWatch update:

This article was written by Eamonn Sheridan at www.forexlive.com.

Oil prices have been moving up since late December 2023 and are now (for Brent) forming a ‚Golden Cross‘. This is a sign that technical analysts like, when a shorter-term moving average (MA) crosses above a longer-term MA:

• 50 and 200 day simple moving averages (SMAs) are commonly used, but those parameters are not chiselled in stone somewhere

Brent has thrown out the signal now, WTI is not quite there. I’ve used the free charts on our site, that you can access here. Or of course, use your own charting program as you prefer.

Brent below. Check out the link the chart above and use the ‚BRENT‘ code shown in the chart. Its not really visible on the screenshot below but around $91 there will be a lot of work to be done (ie resistance).

WTI:

This article was written by Eamonn Sheridan at www.forexlive.com.

I am looking for Bitcoin to achieve a new all time high in the near future. See where it might find sellers.

🔍 Technical perspective for the crypto king:

• As I delve into the weekly Bitcoin chart, it’s clear that the bullish momentum continues to surge. I’m setting my sights on a $79k target, driven by key technical formations and recent price dynamics.

🧲 Double resistance magnet:

• We are on the brink of engaging with a double resistance magnet, which historically attracts price due to its technical significance. This includes:
  • A formidable red resistance line that has been tested twice before: marking the weekly highs of April 12th, ’21 and October 18th, ’21.
  • The upper boundary of the prominent yellow channel.

🚀 Current trends for BTCUSD:

• Regaining Historic Heights: Bitcoin has impressively recaptured its significant historical all-time high of $69,000.
• Telling Tail Signs: The pronounced tails on this week’s candlestick and those from two weeks ago reveal underlying buying pressure, suggesting that lower prices are being actively rejected.

📊 Market behavior in crypto: Still bullish:

• The upward trend is evident through the ascending channel colored in yellow, indicating sustained positive momentum.
• The market is consistently carving out higher lows, signaling enduring strength in the uptrend.
• Our eyes are now on the resistance line that’s being challenged for the third time, potentially setting the stage for a pivotal breakout or a strategic retracement.

📈 Strategic considerations when trading bitcoin:

• Await a definitive push above the current all-time high to consider bullish entry points.
• Stay cautious and observant as the market approaches these significant resistance levels.

⚠️ Caution for bitcoin short sellers here (near the previous all time high):

• Short sellers might want to hold their positions, especially with the anticipation of stop orders being triggered above the all-time high, fueling a further surge in price.

🌐 Message to ForexLive.com community:

• Keep abreast of the evolving market landscape and make informed decisions. Have you not registered for free for receiving updates?
• Remember, trading is inherently risky, and it’s crucial to engage with the market based on thorough analysis and personal risk appetite.
• For continued updates and market insights, check out ForexLive.com.

This article was written by Itai Levitan at www.forexlive.com.

• US March non-farm payrolls +303K vs +200K expected
• Canada March employment -2.2K versus +25K expected
• US February consumer credit outstanding +14.12B vs +15.0B expected
• Fed’s Bowman: It is not yet time for us to consider cutting rates
• Bowman Q&A: Progress on lowering inflation has stalled
• Baker Hughes US oil rig count +2
• Fed’s Logan: It’s much too soon to think about cutting interest rates
• Hezbollah leader talks tough after Israeli strike on Iran’s consulate. Gold spikes
• White House’s Brainard: I think this is a very encouraging jobs report
• Fed’s Barkin: That’s quite a strong jobs report
• Tesla gives up on plans to build a low-cost car – report
• Italian central bank slashes 2024 inflation forecast in another sign of coming rate cuts

Markets:

• Gold up $33 to $2323
• WTI crude oil up 14-cents to $86.73
• US 10-year yields up 8.1 bps to 4.39%
• S&P 500 up 57 points to 5204
• USD leads, CAD lags

As we wind down the day, the FX changes are small but that doesn’t tell the whole story.

The US dollar jumped 40-50 pips on the non-farm payrolls report as the data and details were roundly hot. The only thing that kept the unemployment rate in check was a rise in the participation rate. Wages would also have been hotter if not for some rounding and a revision to the prior.

Despite that, equity future held in positive territory and that was a sign of things to come. The quirk was that yesterday there was a rout in risk trades late in the day on Middle East war fears and that began to unwind. With that, the dollar eventually gave back all it’s NFP gains and equities roared.

There was no lack of Fedspeak and certainly tilted more hawkishly but the market is still in a data-dependent mood. June Fed probabilities have dwindled to close to 50% and there are 65 bps in cuts priced this year compared to 70 pre-data. Bonds were also beaten up late in something to watch for the week ahead, especially with CPI on deck.

Perhaps though, the market is looking abroad where government spending is lower and inflation is falling back to target (or lower). The Bank of Italy slashed its inflation forecasts today and Canadian employment was surprisingly weak. The US appears to be more of an outlier and that means that once fiscal stimulus dries up, so will the outperformance. In the short-term that should be a USD tailwind but eventually that will reverse as the bill is paid.

As for the loonie, it fell to the worst levels of the year before bouncing in the broad USD slump later and with the help of new highs for oil.

This article was written by Adam Button at www.forexlive.com.

Canada’s jobs report showed a decline of 2.2K jobs in February, worse than the +25K reading expected. The headline is even worse than it looks when you consider runaway growth in Canadian immigration that led to a rise in the unemployment rate to 6.1% from 5.8%. That’s the highest since 2017.

„The cracks that had been slowly emerging within the Canadian labour market suddenly got much wider in March,“ writes CIBC. „By sector, weakness in headline employment reflected declines in accommodation & food services and retail &
wholesale, suggesting that the sluggishness in consumer spending is impacting hiring plans.“

They note that population grew by 91K in the month with the labour force up by 58K.

„With GDP expected to weaken in Q2 following the surprisingly strong start to the year, we
would expect to see further softening in the labour market with the unemployment rate peaking close to 6.5%. However,
interest rate cuts starting in June should bring a reacceleration in growth, which will help to stabilise the labour market in
the second half of the year and into 2025,“ CIBC writes.

The market is pricing in a 74% chance of a June 5 rate cut and 73 bps of easing this year.

This article was written by Adam Button at www.forexlive.com.

• Credit up $14.12 billion
• Prior 19.49B (revised to 17.68B)

Lending was a tad cooler in February so maybe there are signs that high rates are working? Those 14% rates on used car loans aren’t exactly enticing.

This article was written by Adam Button at www.forexlive.com.

Oil cooled somewhat into the close after hitting the best levels in five months an hour earlier.

I think those buying oil on a potential Iran-Israel war are taking an unnecessary risk in betting on an unknowable outcome. In general, the best trade is to fade war fears and that’s what the broader market did today. If there’s a war premium, it could come out on Monday.

In any case, this is the fourth straight week of gains for brent and the first close above $90. The $90 level is an important one because it’s an area where OPEC might start to bring some barrels back on. Now that’s not going to happen right away and there’s plenty of room for an overshoot but I would be wary of chasing $100.

This article was written by Adam Button at www.forexlive.com.

The Wirecard saga is one of the most-insane things to ever happen in financial markets.

It was the darling of the German stock market and when the FT started to poke around at signs of fraud, the German government banned short selling. In a journalism Hall-of-Fame moment, the reporters persisted and outed the company as a house of cards, leading to its collapse from a peak market cap of €24 billion.

That’s crazy enough.

But the FT is now reporting that COO Jan Marsalek — who is a fugitive and possibly living in Moscow — was a Russian spy. The allegation is that Wirecard itself was used as a shadow financial network to facilitate Russian undercover operations but not only that, Marsalek helped to facilitate spying operations.

That revelation certainly heightens the warnings and threats that FT journalist Dan McCrum faced, and allegations he was being spied on.

This is also an opportunity for me to post my favourite research note:

This article was written by Adam Button at www.forexlive.com.

Headlines:

Switzerland March foreign currency reserves CHF 715B vs CHF 678B prior

Japan’s PM Kishida to Take Appropriate Action if There are Excessive FX Moves

German Factory Orders 0.2% m/m vs 0.6% expected

ECB Likely to Start Cutting Rates Once a Quarter Starting June

UK Construction PMI 50.2 vs 49.8 Expected

Eurozone Retail Sales m/m -0.5% vs -0.3% expected

Markets:

EUR/USD is uneventful after the German data, but US jobs print is expected.

GBP/USD didn’t react too much after better than expected Constructions PMI.

USD/JPY is range bound as Japan PM Kishida said what we already know.

Geopolitical risks loom over the weekend.

This article was written by Gina Constantin at www.forexlive.com.

Yesterday,
the Nasdaq Composite finished the day negative as we got a huge selloff late in
the day. The catalyst was attributed to the news of a possible Israel-Iran conflict which triggered risk off flows and the algos did
the rest to exacerbate the move. If that’s really the case, the market will not
want to be long risk into the weekend, so we might see some more weakness today
or at least a consolidation. A lot will also depend on the US NFP report today as
strong data across the board, especially on the wage growth side, could put
even more pressure on the price heading into the US CPI next Wednesday.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the
daily chart, we can see that the Nasdaq Composite has been diverging with
the MACD for a
long time. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. The price recently broke out of the rising wedge and after
a brief bounce on the key 16206 level where we had the red 21 moving average for confluence, the
market sold off yesterday falling below the critical level. The technicals have
now turned bearish.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the
price bounced on the 16206 level where we had also the 61.8% Fibonacci
retracement level for confluence and eventually
reversed and fell into new lows. The target should now be the 15929 level where
the buyers will likely step in with a defined risk below the level to position
for a rally back into new highs. The sellers, on the other hand, will want to
see the price breaking lower to increase the bearish bets into the next support
at 15453.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the strong bounce on the key 16206 support zone
and then the complete reversal yesterday into the close. The catalyst for the
selloff was attributed to the news of a possible Israel-Iran conflict, which
triggered risk off flows. There’s not much else to glean from this chart and
the market will look forward to the US NFP report today for the next move.

This article was written by FL Contributors at www.forexlive.com.